Passengers who cancel a flight ticket pay a penalty. When an airline cancels the flight, the burden often falls the other way: travelers who must also scrap hotel and rental car bookings have little recourse to recover those costs. Some carriers do not even spell out their liability in their terms when they sell more seats than a plane has and leave passengers behind.
Hotel and Rental Car Cancellations Go Uncompensated
The Korea Consumer Agency said on the 21st that a review of passenger carriage terms at 22 airlines — 11 Korean and 11 foreign — conducted between March and June found that 21 of them, or 95.5%, either had no provisions for compensation beyond a fare refund when a flight is canceled through the airline's own fault, or left the decision to the carrier's discretion.
That leaves travelers unable to recover added costs when a canceled flight forces them to give up lodging, rental cars or admission tickets to tourist sites. The contrast is with passengers who cancel tickets for personal reasons and must pay a penalty.
The Montreal Convention, which governs international air carriage, does not spell out an airline's liability for a cancellation itself. Korea's consumer dispute resolution standards, however, require compensation depending on whether an alternative flight is offered and on the length of the delay.
The European Union, by contrast, requires airlines to pay 250 to 600 euros, or roughly 370,000 to 890,000 won, depending on flight distance when a cancellation is the carrier's fault. Canada sets compensation at 125 to 1,000 Canadian dollars, or about 120,000 to 940,000 won, under its own rules.
Denied Boarding After Overbooking, With Refund Refused
The review also found problems in terms governing overbooking, the practice of selling more tickets than there are seats.
Under Korea's current standards for protecting air transport users, both Korean and foreign carriers must compensate passengers who cannot board because of overbooking.
On international routes, carriers must pay 200 to 600 dollars, or about 280,000 to 850,000 won, depending on the circumstances, when an alternative flight is provided. When no alternative is offered, they must refund the fare and pay 600 dollars.
Two foreign carriers, however, did not spell out separate liability for denied boarding or left the form of compensation to the airline's choice.
In one case, a consumer who was denied boarding on the day of travel because of overselling was given no alternative flight and was also refused both a fare refund and compensation.
Some airlines applied liability caps below the level set by international treaty. Two foreign carriers set their liability limit for a passenger's death or injury at 128,821 special drawing rights, or SDRs. That is about 48 million won less than the Montreal Convention's standard of 151,880 SDRs, equivalent to roughly 314.64 million won.
SDRs are a unit set by the International Monetary Fund and used to calculate liability in international air carriage. The Montreal Convention voids any contract provision that sets an airline's liability limit below the treaty standard.
Staff Shortages as 'Force Majeure'
The review also identified cases in which problems originating inside an airline were written in as grounds for exemption from liability.
Of the 22 carriers surveyed, 12, or 54.5%, included items such as "unforeseen circumstances," "labor shortages" and "technical problems arising after the captain has signed off" among force majeure exemptions.
Securing staff and maintaining aircraft, however, are matters an airline is expected to manage in advance. The agency said treating problems within a carrier's control as grounds for exemption can work against consumers.
Complaints over air services are also rising sharply. The Korea Consumer Agency received 3,201 requests for redress involving passenger air transport services last year, up 26.4% from 2,532 the previous year.
The figure rose from 485 in 2021 to 1,126 in 2022 and 1,705 in 2023, more than sextupling in four years. Of last year's total, 565 cases, or 17.7%, involved failure to carry passengers or delays.
Based on the findings, the Korea Consumer Agency recommended that the airlines revise contract terms that disadvantage consumers. It also plans to consult relevant ministries on ways to improve the rules to reduce consumer harm from cancellations and denied boarding.